The European Central Bank yesterday (Monday) announced a Eu3.053bn increase in settled purchases under CBPP3, taking the total above Eu40bn, with analysts noting that a lower increase than a week earlier reflects a lower level of new issuance in the corresponding period.

Monday’s figure took total CBPP3 outstandings to Eu40.255bn as of 30 January, compared with Eu37.202bn on Monday of last week (26 January).

Last week’s total was Eu4.071bn up on the previous week, with 11 eligible deals worth Eu8.75bn having settled in the corresponding period. In the period covered by yesterday’s figure only three eligible deals worth Eu2.25bn were settled.

Analysts said the figures show that an increase in secondary market purchases had compensated for the lack of primary market supply.

“We estimate the CBPP3 bought Eu660m (29%) of these deals based on the order book statistics,” said Jussi Harju, covered bond analyst at Barclays. “This suggests to us that the remaining Eu2.393bn of the CBPP3 portfolio growth came from secondary purchases.”

He put average daily secondary purchases in the week at Eu479m, versus Eu344m in the prior week and an average of Eu441m since the start of CBPP3.

“This was not in line with our expectations and we remain hopeful that this trend will not continue once the Eurosystem starts its expanded asset purchases,” said Harju.

Florian Eichert, senior covered bond analyst at Crédit Agricole, said the steady pace underlines his view that despite a somewhat less aggressive approach to primary markets for CBPP3, the ECB intends to maintain its average pace of around Eu3bn per week.

“We don’t think this will change going forward even if the Eurosystem starts to buy certain agencies and European Institutions as well as sovereign debt from March.”

This week three CBPP3 eligible deals settle, again totalling Eu2.25bn.